Ontario Long-Term Asset Fund Project

Overview: 

In October 2024, the Ontario Securities Commission (OSC) consulted on thhe opportunity to Improve Retail Investor Access to Long-Term Assets through Investment Fund Product Structures.  OSC noted a number of concerns with the Proposal to set a framework for a new type of investment fund product structure (an Ontario Long-Term Fund or OLTF), including that:

  • the structural elements of the Proposal might be too restrictive, which could have an adverse impact on the potential market for OLTFs,
  • the compliance costs could be too high and potentially offset any illiquidity premiums,
  • there may not be sufficient evidence of retail investor demand or the investor benefit that might be derived from the opportunity to invest in long-term assets through an investment fund product structure, and
  • the investor protection elements outlined in the Proposal may not sufficiently address the risks of holding long-term assets, the complexity of an OLTF structure, the potential for conflicts, and the potential for higher regulatory costs.

On 29 May 2025, OSC published a staff notice announced that it would pursue the Ontario Long-Term Asset Fund Project through the OSC LaunchPad in collaboration with the OSC Innovation Office. The project supports applications for “novel exemptive relief” to create retail-accessible funds for long-term assets and is an opportunity for the OSC to continue to examine these issues, including by providing stakeholders with additional opportunities to provide feedback.

 

Key features of the OLTF Project

The OSC provides expanded support for novel exemptive relief applications, including by facilitating confidential pre-file discussions where firms can discuss bespoke investor protection controls and other key issues with staff that may assist them in developing a product.  

A key objective of the OLTF Project is to examine market demand and the investor experience across different fund structures and different types of long-term assets. OSC is collecting data, feedback, and perspectives from stakeholders, including investors, investment fund managers, portfolio managers and dealers, on various topics related to retail investor access to long-term assets through investment fund structures. OSC is also studying developments, including products launched, in other jurisdictions that have adopted, or propose to adopt, regulatory frameworks that facilitate long-term asset fundsn.

 

ACC priorities

On 7 February 2025, AIMA and the ACC responded to the OSC consultation paper. AIMA and the ACC welcomed the initiative and argued that the success of the US Business Development Company (BDC) system, as well as the recent EU and UK ELTIF and LTAF vehicles, demonstrate the potential for vehicles that can channel retail investors into private long-term assets.

AIMA and the ACC highlighted three key issues for the OSC to address to ensure that OLTF meets its objectives:

  • The requirement for OLTFs to have a cornerstone institutional investor and for this to be done via a Collective Investment Vehicle (“CIV”).  This requirement has the potential to undermine the appeal of the OLTF to managers.  Retail and institutional investors will typically have different needs and expectations on how they wish to invest in long-term assets, as well as the type of assets (risk) they are seeking.  In addition, we expect that this requirement will restrict the pool of sponsors who will be able to satisfy this requirement and therefore limit the number of funds which may be made available to the investors.  We encouraged the OSC to consider how alternative approaches which permit institutional and retail investors to be invested in similar assets might be permitted within the OLTF regime.  We would also propose that the OSC gives consideration to permitting OLTFs marketed solely to retail clients to invest in long-term assets without cornerstone investors in any form.  This would align the OLTF with the approach of BDCs, LTAFs and ELTIFs which all provide for forms of these vehicles which are marketed solely to retail investors.
  • A proportionate and principles-based approach to any new rules.  While many of the proposed rules for the OLTF have merit on their own terms we believe that in aggregate they risk being disproportionate.  Similarly, many of the proposed prescriptive requirements relating to portfolio diversification, notice periods, borrowing and redemption frequencies will restrict the ability of asset managers to develop products that are suitable to their investment strategies and the needs of investors. Rather than introduce prescriptive rules, we would encourage the OSC to apply a principles-based approach to how these risks should be managed.  This could be supplemented by OSC setting out practices they might ‘typically’ expect to see but with an option for managers to apply a different approach where appropriate and with some justification to regulators.  This approach would be consistent with that adopted by the UK and EU under the LTAF and ELTIF regimes. 
  • Integrating OLTFs into retail market. Our members were concerned that some of the overly prescriptive proposals relating to disclosure and distribution will have an adverse impact on perceptions of the OLTF amongst prospective retail investors and will limit distribution by dealers. While there are risks associated with investment in long-term or private assets, we believe that many of these are already dealt with through the existing distribution or disclosure requirements.  We would therefore encourage the OSC to only introduce any additional rules where there is a strong justification for doing so.  We believe that this approach will support retail investors’ ability to invest in long-term assets on familiar terms while still being appraised of the risks associated with such investments.

 

Recent developments

On November 20, 2025 OSC staff published OSC Staff notice 81-740 Update on Long-Term Asset Fund Project, inviting further stakeholder engagement on:

  • the viability of different investment fund product structures to facilitate long-term asset investment opportunities for retail investors,
  • elements of the Proposal that may impede adapting the OLTF structure for product launch,
  • elements of the interval fund structure set out in the relief granted to the Mackenzie Northleaf Private Credit Interval Fund that may impede adapting the interval fund structure for product launch,
  • whether there may be a retail market for existing private funds that invest in illiquid assets and are “qualified investments” under registered plans, and
  • possible solutions to address the challenges with distributing securities of long-term asset funds with a high percentage of illiquid assets.

It also noted developments in the UK that permit long-term asset funds to be held in ISA stock and share accounts and in the US permit private funds to hold illiquid assets in 401(k) defined contribution pension plan accounts and invite stakeholder comments on the potential and challenges of applying these developments in Ontario or Canada. 

 

Looking ahead

The feedback and data gathered, together with the exemptive relief decisions granted under the project, will inform next steps, including potential rulemaking initiatives.

 

(Last updated: July 2026)